MKTG 301 Exam 2 Study Guide Chapter 2 Company and Marketing Strategy 1 Steps in Strategic Planning Process a STEP 1 Mission Statement i What is our business ii Who are our customers iii Core competencies iv What business should we be in 1 Characteristics a Market oriented NOT PRODUCT ORIENTED b Meaningful c Specific d Motivating e Reflective of company s capabilities f Focus on customer experience b STEP 2 Setting Company Objective and Goals i Good mission statement leads to detailed supporting objectives for each level of management 1 Can be measured c STEP 3 Designing Business Portfolio i Business Portfolio The collection of businesses and products that make up the company 1 Ex ESPN s portfolio consists of more than 50 business entities such a ESPN cable channels ESPN Radio ESPN com ESPN Magazine etc a ESPN is just on unit in an even broader portfolio of it s parent company The Walt Disney Channel ii Businesses may be called Strategic Business Units SBU 1 Divisions 2 Markets 3 Product Lines 4 Etc The BCG Growth Share Matrix Examples Take money as Cash Cow Try to us money to build up revenue trying to invest money to become Star which is more stable in the long run Coca Cola Cash Cow Low growth rate but high market share Coke Zero Question Mark High growth rate but low market share Cherry Coke Star High growth rate and high market share Little advertising needed New Coke Dog Reason you ve probably never heard of it iii BCG Criticism 1 Limited number of variables a Difficult to accurately measure market share and growth 2 Organizational structure of a company can make this very confusing a Ex Disney all segments of the company act as different entities such as their parks cruises and movies 3 Placement of a business in matrix is highly dependent on definition of market iv Product Market Expansion Grid v Market Penetration 1 Increase sales to current customers without changing product 2 LEAST RISK 3 Manipulating price place promotion 4 Ex Starbucks App and loyalty program Starbucks teaming with iTunes to provide song of the week and advertising all examples of market penetration vi Product Development 1 Offering modified products to current markets 2 Ex Starbucks serving food and prepackaged coffee Starbucks having a licensing agreement with a manufacturer such as Pepsi to bottle their Starbucks Frappuchinos vii Market Development 1 Identifying and developing new markets for current products 2 Ex Starbucks opening new stores in other countries viii Diversification 1 Introducing a completely new product to a different market 2 Ex Starbucks owning Evolution Fresh organic juices d STEP 4 Planning and Other Functional Strategies i Value Chain 1 Series of internal departments that carry out value creating activities to design produce market deliver and support a firm s products 2 Customer value KEY INGREDIENT TO SUCCESS a Must practice customer relationship management and partner relationship management i These form the Value Chain ii Market Management 1 Planning a Develop strategy plans b Develop market plans 2 Implementation a Carry out plans 3 Control a Measure results b Evaluate results c Take corrective action iii Marketing Plan 1 Major department in each unit work together to accomplish strategic objectives a Financing b Accounting c Purchasing d Human resources e Etc 2 Marketing provides a guiding philosophy that suggests company strategy a Executive summary b Current marketing situation c Objectives d Action items budget controls e Marketing strategy STP i Segmentation Grouping consumers ii Targeting Identifying segment iii Positioning Getting to consumers 3 SWOT Analysis a Strengths b Weaknesses c Opportunities d Threats iv SWOT Analysis SWOT GOAL to match company s strengths to attractive opportunities in the environment while eliminating or overcoming weaknesses and minimizing threats 1 Strengths a Internal capabilities that help company reach objective b Mainly microenvironment c Ex Google i Strengths Google it becoming a verb ii Weaknesses known for poor credibility at times and controversy over privacy rights 2 Weaknesses a Internal limitations that interfere with objective 3 Opportunities a External factors that the company may be able to exploit to its advantage b Ex Google i University alliances ii Social networking Google 2 Marketing Implementation 3 Marketing Controls 4 Strategic Planning 4 Threats a External factors that may challenge company s performance b Ex Google i Over exploitation a Turning marketing strategies and plans into marketing actions to accomplish marketing objectives b Executing plan hardest part c To be successful depends on i Company culture ii Employees shared beliefs and values iii Organizational structure iv Reward systems Employee incentives d More about personal relationships a Evaluating results of marketing strategies and plans a INTERNAL i Organization s goals and capabilities b EXTERNAL i Marketing opportunities a Long term survival a Segmentation i Dividing market place into smaller more manageable segments 1 STEP 1 Strategy or objective 2 STEP 2 Describe segments b Targeting i Identifying who is your best interest to appeal to 1 STEP 3 Evaluate target segments 2 STEP 4 Select target market c Positioning i Establish 4 P s to attract consumers product price place promotions 1 STEP 5 Identify and develop positioning strategy a Dividing market Group of potential buyers b To be considered a market i Must be a need for product offering ii Must have ability to purchase iii Must be willing to spend the money on your product Chapter 6 Customer Driven Marketing Strategy 1 Ultimate Goal of Business 2 Segmentation Targeting Positioning STP 3 Segmentation Strategy 4 SEGMENTATION iv Must have authority to make purchase c Requirements for a market i Must be measurable ii Accessible 1 Reach through communication and distribution a Where can product be purchased iii Differentiable 1 Each segment should respond differently to marketing efforts iv Substantial 1 Segment must be large enough to be profitable v Actionable a Describing segments i Geographic Segmentation 1 Dividing market into different geographic units a Ex country city population size ii Demographic Segmentation 1 Dividing market based on demographic variables 2 Easier to measure a Ex race age gender income iii Psychographic Segmentation 1 Dividing a market based on a Personality b Lifestyle c Social class 2 Ex Mountain Dew projects a youthful rebellious adventurous go your own way